Intuitu personae (Latin: "in consideration of the person") characterises a contract or commercial relationship entered into primarily because of the personal qualities of one party — expertise, reputation, network, relationships. In M&A, a company whose value is closely tied to one or a few key individuals presents a key person risk: departure of the founder, lead salesperson or technical expert may trigger immediate client or contract losses. This risk is quantified in the specific risk premium component of the WACC and addressed through contractual retention mechanisms and earn-out structures.

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Example: due diligence on an advisory firm reveals that 70% of revenue is generated by the founder-CEO. This strong intuitu personae leads to structuring a 3-year earn-out conditioned on the founder's retention, an enhanced personal non-compete clause and a 15% reduction in the control premium — reflecting the real risk that a significant portion of the value acquired may not survive the founder's departure.

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Hectelion assesses and quantifies intuitu personae risk in valuations and due diligence to calibrate appropriate contractual protections and price adjustments.